The .ini looks pretty good, but you may want to change paddle_device to mouse instead of keyboard.
#
# CORE INPUT AUTOMATIC ENABLE OPTIONS
#
paddle_device Keyboard
It won't make a difference on Arkanoid since spinner = dial, but it should work for Pong or Warlords since potentiometer = paddle.
if Enter -- Esc -- Enter -- Esc doesn't reset the input to default, you might try deleting the game .ini or even delete mame.ini and recreate it from scratch using the "mame64 -cc" (create config) command.
Multimouse may be causing problems -- you may want to disable it unless it is absolutely necessary.
Scott